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Lithium company points to late 2027 for Thunder Bay refinery startup

Avalon Advanced Materials seeks to peddle petalite to the electric vehicle manufacturing masses
Avalon Advanced Materials' Separation Rapids property, north of Kenora (Company photo)

A lithium player’s aspirations in 2020 to fast-track a refinery project into production in Thunder Bay is being walked back by new management.

After some front office reshuffling, Avalon Advanced Materials is now pushing out the start date of a lithium hydroxide processing plant by about four years.

With more pragmatic timelines in place, Avalon is now looking to start mining at its Separation Rapids project, north of Kenora, in late 2025 or early 2026, if government permits and approvals come through a timely fashion.

The mined material would feed a lithium hydroxide production plant in Thunder Bay, now projected to start in the fourth quarter of 2027. It would follow a two-year run-up of engineering, procurement, construction and commissioning of the facility.

Now, as in 2020, Avalon's has yet to finalize the acquisition of land in the city for the processing plant. 

Three years ago, Avalon emerged as a frontrunner to build and run a lithium chemical refinery in the northwestern Ontario city by 2022 through a project partnership with Rock Tech Lithium, a collaboration that’s since dissolved.

The company’s pitch is that its lithium refinery would serve as a processing hub for other producers in the region.

Now Avalon is working in an increasingly crowded space amid a number of junior miners with promising deposits in the region. The companies with more advanced exploration projects are all bent on establishing their own lithium hydroxide processing plants either in the city or outside the region. 

Rock Tech, for example, plans to float lithium concentrate from its Georgia Lake spodumene project, in the Nipigon area, to Europe where construction is starting on a refinery in Germany.

Avalon’s main asset is its Separation Rapids Lithium Project, 70 kilometres north of Kenora, where Avalon has a measured and indicated resource of 8.4 million tonne resource at 1.408 (Li2O) lithium oxide and an inferred resource of 1.79 million tonnes at 1.34 per cent.

Back in 2018, Avalon released a preliminary economic assessment showing a 20-year mine life.

In looking to expand the resource, the company is running a deep drilling program on its deposit and other prospective targets on its 10,000-acre property. Avalon has been releasing some assay results which, they say, shows potential for a larger resource.

The mined material would be made into concentrate at the mine site to ship to Thunder Bay for conversion into lithium hydroxide, a battery-grade material that's in demand by electric vehicle battery manufacturers.

The company is also looking to tap into government project funding through critical minerals programming.

To do that, Avalon selected a new president with Zeeshan Shad, who, according to his bio, has worked on energy projects, policy and communications for the Alberta government and for a period of time in the Prime Minister’s Office. The company is now looking for a new CEO this week as Don Bubar is retiring.

During a web call at the Emerging Growth Conference in March, Shad said they were in discussions with government while looking to take on a development partner in a tri-lateral arrangement. They seek to answer Ottawa’s call for mid-stream critical minerals processing capacity.

Last September, Avalon signed a memorandum of understanding with LG Energy Solution, a South Korean battery manufacturer. 

In laying out its plans for 2023, company announced that it’s starting a definitive feasibility study for a mine at Separation Rapids. The consulting engineering firm has yet to be announced.

The deposit at Separation Rapids is mostly petalite, a type of lithium that’s in demand in the specialty glass and ceramics market. The concentrate can be sold directly to those manufacturers, presenting up some upfront revenue. 

But Avalon also believes it can also serve the North American electric vehicle market with a petalite and lepidolite concentrate, a sector that’s dominated by spodumene lithium. 

Shah said in the web call that the spodumene supply market is tightening and petalite is suitable in lithium hydroxide production as a “substitute strategy” for manufacturers. They’re conducting lithium hydroxide conversions tests with a technology group to come up with a proprietary processing technology.


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